Microsoft to make CES 2012 its last amid claims of a falling out

Microsoft says that its CES 2012 keynote will be its last, as it has decided …

Claiming that the timing of the event meshes poorly with the company's product launches, Microsoft Corporate Vice President of Corporate Communications Frank X. Shaw announced on Tuesday that after CES 2012, Microsoft would no longer deliver a keynote address or have a large booth at the annual trade fair. CES's organizers, the Consumer Electronics Association, confirmed that the 2012 keynote would be Microsoft's fourteenth and last.

Shaw's explanation appeared to make sense. Microsoft's major consumer product launches tend to fall in the second half of the year, and next year's big release—Windows 8—isn't going to buck that trend. There's an outside chance that Microsoft might talk Xbox 720 at CES 2012, but that too won't be launching any time soon. The company's presence at CES has traditionally been big and expensive, and the company no longer feels it yields a valuable return on that investment.

After the 2011 keynote earlier this year, this was hardly surprising. The 2011 keynote was dominated by a mix of products already on the market—Kinect, Windows Phone—and the Windows-on-ARM processor announcement. Though significant, this announcement had no relevance to consumers or indeed 2011. Windows-on-ARM products will only ship in 2012, and most consumers have little interest in the vagaries of instruction set architectures or system-on-chip designs.

But intrigue was added to this apparently straightforward announcement when GigaOM reported that according to people "inside Microsoft," the withdrawal was due to CEA refusing to allow Redmond to make the keynote presentation beyond next year. In other words, it wasn't the software giant's decision at all. In retaliation, Microsoft pulled its future booth plans.

The story took another twist when The Verge reported that its sources backed Shaw's original explanation. CEA tried to get Microsoft to sign on for another three years of keynoting after 2011, but Microsoft refused, signing on for only a single additional year (2012)—showing that the company's plans to leave the event are long-standing. CEA did want more money for future keynotes, which helped push Microsoft away, but ultimately the decision to leave was Microsoft's.

Microsoft will still be at future CES events in some capacity to connect to partners, press, and the general public. But big reveals and launches of major products will in the future be made at Microsoft-organized, Microsoft-specific events. Events that happen when Redmond says they should happen, and that make Microsoft products the star of the show.

CES may not line up with MS's product launches, but MS is the king of pre-announcements, and CES has provided that platform for them.

IIRC, MS started keynoting CES as a counter to Steve Jobs's keynotes at MacWorld.

I think MS got booted from CES because the market is shifting away from MS. that Ballmer would take offense at the idea that MS hasn't kept up with the times just further shows what an incompetent leader he is.

But big reveals and launches of major products will in the future be made at Microsoft-organized, Microsoft-specific events. Events that happen when Redmond says they should happen, and that make Microsoft products the star of the show.

Sounds like a smart move. Similar to what Apple's been doing for a few years now.

[...]I think MS got booted from CES because the market is shifting away from MS. that Ballmer would take offense at the idea that MS hasn't kept up with the times just further shows what an incompetent leader he is.

Do you actually believe the drivel that you type on the keyboard? Yeah, growing profits and revenue, Microsoft sure is dying quickly. They'll be dead within a year with their $6 billion+ profit every quarter and $50 billion+ in the bank!

The Verge's version of events seem more plausible than GigaOM. If I were the CEA, I wouldn't have announced this two weeks before the show, and I would have waited until I knew I had someone lined up to take Microsoft's place (Google, Facebook, somebody big). Seems more likely that MS made this decision and wanted to build a little extra buzz before Ballmer's keynote and dominate the pre-CES headlines going into Vegas.

I guess we'll know how this shook out in six months -- if CES announces in June that Apple is going to join CEs and do the opening keynote, well, then GigaOM's version will be a lot easier to swallow. But anything short of that will look like MS ditched CES and left the organizers scrambling for a suitable replacement.

Reading the various articles on this subject, it seems to me that the media is trying to manufacture a falling out, publishing various comments from "sources" to try and incite one of the sides to say something rash.

Microsoft is no longer King. Moblie OSs are over taking Desktop/Laptop OSs. That where the market is going.

I hear people says this and things like this a lot nowadays and it is just a bunch of BS imo. You seriously think you can write programs on a a mobile OS or device? Don't be so foolish. You need traditional PCs to do all the development. Mobile solutions are just not matured enough yet. Mobile devices do the casual things like gaming, communications, and web browsing well, but trying to actually write a serious program on them or building a spreadsheet is not something practical. This is why the mobile device market is booming when compared to the PC. They are simply reaching an audience that was previously untapped. The PC market is still there, its just not growing as much because it is already saturated.

I guess we'll know how this shook out in six months -- if CES announces in June that Apple is going to join CEs and do the opening keynote, well, then GigaOM's version will be a lot easier to swallow. But anything short of that will look like MS ditched CES and left the organizers scrambling for a suitable replacement.

Well, given that Apple pulled out of Macworld Expo, which takes place in January, due to pretty much the same reasons, I doubt they'll go into CES.

I guess we'll know how this shook out in six months -- if CES announces in June that Apple is going to join CEs and do the opening keynote, well, then GigaOM's version will be a lot easier to swallow. But anything short of that will look like MS ditched CES and left the organizers scrambling for a suitable replacement.

Well, given that Apple pulled out of Macworld Expo, which takes place in January, due to pretty much the same reasons, I doubt they'll go into CES.

I was being sarcastic to prove a point, which was the CEA would have to get a pretty big act lined up to replace Microsoft if they indeed pushed MS out. If it's Meg Whitman and HP doing the opening keynote, well, then it would seem pretty obvious to me that Microsoft made the decision to leave and the CEA scrambled for months trying to find a respectable fill-in. If it's Apple or Facebook or something on that level -- as farfetched as those would be -- then you could make the argument that CEA divorced Microsoft for a better-looking option.

But since you brought up Apple and MacWorld, it does seem like Microsoft is taking another page from their playbook. It will be interesting to see if MS can pull off the same kind of marketing/product announcements.

I still remember the Microsoft smart home display. If the refrigertor door was left open, it would send an instant message for you to go close the door. My comment: the refrigerator should be smart enough to close it's own door.

When mobile profits eventually exceed desktop profits, the world will take notice. And for a trade show with the word 'consumer' in the title, mobile is extremely relevant.

(If it were a major enterprise-oriented trade show and Microsoft pulled out, this would be a pretty significant story.)

The problem with that infographic is that it's combining Apple's different hardware offerings with its overall offerings - which is no problem when comparing Apple to Apple.

But MS doesn't make hardware (except for the Entertainment division, and some of its peripherals, which are great, but minor to its business). Apple's big seller is the iPhone, NOT iOS. Apple is now mostly a hardware mfg that also happens to make the OS that hardware is locked into.

So comparing "mobile profits" between the two isn't really valid. Apple makes a mobile device and it's mobile profits are huge. MS doesn't make a mobile device, and shouldn't, but rather makes the OS that hardware mfgs can use on their devices.

When mobile profits eventually exceed desktop profits, the world will take notice. And for a trade show with the word 'consumer' in the title, mobile is extremely relevant.

(If it were a major enterprise-oriented trade show and Microsoft pulled out, this would be a pretty significant story.)

The problem with that infographic is that it's combining Apple's different hardware offerings with its overall offerings - which is no problem when comparing Apple to Apple.

But MS doesn't make hardware (except for the Entertainment division, and some of its peripherals, which are great, but minor to its business). Apple's big seller is the iPhone, NOT iOS. Apple is now mostly a hardware mfg that also happens to make the OS that hardware is locked into.

So comparing "mobile profits" between the two isn't really valid. Apple makes a mobile device and it's mobile profits are huge. MS doesn't make a mobile device, and shouldn't, but rather makes the OS that hardware mfgs can use on their devices.

Different model and needs a different comparison.

Exactly this. If you add in the operating income on products of Dell alone (they only split it out by products and software/services, but presumably most of products is Windows based machines) you need to add about another $2.5b to that operating income. And Dell sells 12% of the world's computers.

The markets are very different, that's without a doubt. Apple has a rarity, a high margin product that has high sales so it looks fantastic on paper and gets investors all worked up. But really, it's not that important, margins will come down and the product will become just another daily tool to be used and it will co-exist with the PC for quite a while yet.

[...]I think MS got booted from CES because the market is shifting away from MS. that Ballmer would take offense at the idea that MS hasn't kept up with the times just further shows what an incompetent leader he is.

Do you actually believe the drivel that you type on the keyboard? Yeah, growing profits and revenue, Microsoft sure is dying quickly. They'll be dead within a year with their $6 billion+ profit every quarter and $50 billion+ in the bank!

RIM said the same thing back in 2007.

The collapse of a tech giant is a slow process. There are major shifts happening with consumer tech that can completely leave MS exposed if they aren't careful, and they know that. Hence, Windows 8 on a tablet.

When mobile profits eventually exceed desktop profits, the world will take notice. And for a trade show with the word 'consumer' in the title, mobile is extremely relevant.

(If it were a major enterprise-oriented trade show and Microsoft pulled out, this would be a pretty significant story.)

The problem with that infographic is that it's combining Apple's different hardware offerings with its overall offerings - which is no problem when comparing Apple to Apple.

But MS doesn't make hardware (except for the Entertainment division, and some of its peripherals, which are great, but minor to its business). Apple's big seller is the iPhone, NOT iOS. Apple is now mostly a hardware mfg that also happens to make the OS that hardware is locked into.

So comparing "mobile profits" between the two isn't really valid. Apple makes a mobile device and it's mobile profits are huge. MS doesn't make a mobile device, and shouldn't, but rather makes the OS that hardware mfgs can use on their devices.

Different model and needs a different comparison.

Exactly this. If you add in the operating income on products of Dell alone (they only split it out by products and software/services, but presumably most of products is Windows based machines) you need to add about another $2.5b to that operating income. And Dell sells 12% of the world's computers.

The markets are very different, that's without a doubt. Apple has a rarity, a high margin product that has high sales so it looks fantastic on paper and gets investors all worked up. But really, it's not that important, margins will come down and the product will become just another daily tool to be used and it will co-exist with the PC for quite a while yet.

As long as we're armchair CEOing:MS has higher margin software with higher sales (windows and office). Still looks fantastic on paper. They are being commoditized by the 'cloud' and mobile and BI server stuff. No one builds on MS Office as a platform anymore. No one outside gaming builds on Windows, and even that is increasingly web and 'Steam' based. So MS is more vulnerable to change, and in this last decade they have been clearly worse at adapting and continue to fall farther behind with their clone products. They are losing talent. They are losing share in new, important markets. They have lost focus and should probably retrench around their enterprise offerings.

Evidence of falling behind: MSN was too late to capture AOL's market before it was obsolete. Hotmail was supplanted by gmail and never replaced yahoo mail. PocketPC never put Palm out of business before the business was obsolete. WM never caught up to RIM. WP7 is doing worse than WM. Tablet PC still hasn't morphed into an ipad competitor. Bing, Zune, Kin, UMPCs ... The xbox division is the only success, and that came with great losses and they basically lost the PC gaming market in the interim.

It's not a given that MS will always dominate the software world, just like we don't still buy IBM PCs or drive Model Ts or use Selectrics or wear Timexes. I think they're keeping the enterprise/business market and that their mobile devices will eventually gain traction there, even if it isn't a slam dunk. The culture of IT is too strong and MS is too strong in business. They've executed well there. MS consumer business is toast outside xbox. They might as well leave CES, and if you peruse their past demos, you'll see why.

I agree that outside of Windows, Office and Xbox, Microsoft really has little reason to be in CES - it always seemed to be more of a summary of either things they said at their own events or how well the year went for Microsoft. I disagree with your assertion that Microsoft is 'toast' in the consumer market - since consumers are still buying both Windows PCs and Office by the bucketload, and I think the prevailent opinion is that tablets and smartphones are both companion devices rather than PC replacements. Maybe that will change in the long run, but for now I don't really see it.

In any case I do wish you'd pick your examples better:

solomonrex wrote:

Hotmail was supplanted by gmail and never replaced yahoo mail.

Gmail is the third largest email provider in terms of monthly usage. Yahoo! Mail is second. Guess what's first.

Quote:

PocketPC never put Palm out of business before the business was obsolete. WM never caught up to RIM.

Yes, PalmOS was so successful that Palm decided to start selling PocketPCs just to rub it in their face.

In any case, both PDAs and smartphones pre-iPhone were predominately bought for business purposes, not personal use, so I don't see how either is relevent.

Quote:

The xbox division is the only success, and that came with great losses and they basically lost the PC gaming market in the interim.

The PC gaming market was never very big in the first place, at least compared to consoles - although I'd love to see some numbers on what exactly constitutes as 'lost'. (Or indeed, 'the PC gaming market' - how would you measure it? Game shipments? Hourly usage for games? Does Solitaire count? What about Facebook games?)

"No one outside gaming builds on Windows, and even that is increasingly web and 'Steam' based. So MS is more vulnerable to change, and in this last decade they have been clearly worse at adapting and continue to fall farther behind with their clone products. They are losing talent. They are losing share in new, important markets. They have lost focus and should probably retrench around their enterprise offerings."

Are you.... serious? Like do you seriously believe this? I mean it;'s one thing of you have to highlight some sort of drop from 95+% to 85+% as like a huge blow to MS, but...

Do you really believe the things you are saying? Because they aren't true now, and weren't true historically, as another poster ably demonstrated. So your choice is simply to belive that certain things that are true weren't true so you can.. build a shinier case for your product? I mean, I hope to god it's your product, because then at least you'd have some self interest in the game. If you aren't involved in the manufacture, sale, or development of this "alternative" platform... well..... damn.

I agree that outside of Windows, Office and Xbox, Microsoft really has little reason to be in CES - it always seemed to be more of a summary of either things they said at their own events or how well the year went for Microsoft. I disagree with your assertion that Microsoft is 'toast' in the consumer market - since consumers are still buying both Windows PCs and Office by the bucketload, and I think the prevailent opinion is that tablets and smartphones are both companion devices rather than PC replacements. Maybe that will change in the long run, but for now I don't really see it.

In any case I do wish you'd pick your examples better:

solomonrex wrote:

Hotmail was supplanted by gmail and never replaced yahoo mail.

Gmail is the third largest email provider in terms of monthly usage. Yahoo! Mail is second. Guess what's first.

Quote:

PocketPC never put Palm out of business before the business was obsolete. WM never caught up to RIM.

Yes, PalmOS was so successful that Palm decided to start selling PocketPCs just to rub it in their face.

In any case, both PDAs and smartphones pre-iPhone were predominately bought for business purposes, not personal use, so I don't see how either is relevent.

Quote:

The xbox division is the only success, and that came with great losses and they basically lost the PC gaming market in the interim.

The PC gaming market was never very big in the first place, at least compared to consoles - although I'd love to see some numbers on what exactly constitutes as 'lost'. (Or indeed, 'the PC gaming market' - how would you measure it? Game shipments? Hourly usage for games? Does Solitaire count? What about Facebook games?)

There is a fascinating article in the economist about this subject they count all games played as being played by gamers because even though some games are free to play you can make ingame purcahses. It is said that when games go free to play they can triple their earnings. Also Microsoft never had the pc gaming market in the first place as it was as diverse then as it is now unless you are measuring it against games not made for pc eg. games for mac (ha ha I couldn't even name one).

Microsoft has a very difficult road ahead. The culmination of the iPad, iPhone and iPad has resulted in a severe blow and it's difficult to see how MS is going to pull off a coup going forward. They will also very likely miss the TV revolution which Apple may sweep as well.

MS should have been doing something in the TV space two years ago, but MS seems to always be battling the war they just lost rather than innovating ahead.